XXX is a TTT company that distributes electronic components in xxx imported from the YYY. Its main

Fantastic news! We've Found the answer you've been seeking!

Question:

XXX is a TTT company that distributes electronic components in xxx imported from the YYY. Its main supplier, AMERICAN TECH has made a shipment of components amounting 1,200,000 USD to be paid within three months. XXX Chief Financial Officer fears that USD can move against their interests, so he decides to inquire about the possibility of hedging EURUSD exchange rate risk.

1) Considering the following market information, which will be EURUSD 3 months forward rate? EURUSD spot rate: 1.3350 USD 3 months interest rate: 1.25% EUR 3 months interest rate: 1.75%

2) What is the risk for XXX, an appreciation or a depreciation of USD?

3) If within 3 months EURUSD is trading at 1.1820, how much will have saved the company for hedging the commercial operation?.

Posted Date: May 10, 2024 03:32 AM

See More Questions

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
1. what's the IDENTIFICATION OF PROBLEM( only need one problem)? 2. what's the SWOT ANALYSIS? 3. what's the DECISION CRITERIA? 4. what's the 3 ALTERNATIVES? the case link about " Offering Fleet...
Use the following data to determine the total dollar amount of assets to be classified as Long-Term: Sons of Anarchy Office Supplies Balance Sheet December 31, 2029 Cash $ 130,000 Accounts payable $...
Softa Company borrows $ 850,000 from Deer Financing Associates by securing a revolving line of credit at a 6% interest rate on April 15. Interest is due and payable at the end of each month based on...
A mail-order firm processes 4,900 checks per month. Of these, 60 percent are for $39 and 40 percent are for $71. The $39 checks are delayed two days on average; the $71 checks are delayed three days...
Describe the effect operations technology has on an organization from both Thompsons and Woodwards points of view.
For each of the investments shown in the following table, calculate the rate of return earned over the unspecified timeperiod. Cash flow Beginning-of End-of pcriod valuc S 100 118,000 Investment...
Suppose $8500 is deposited into a savings account earning 5% interest compounded quarterly. Find the balance in the account in 5 years, rounded to the nearest cent. Use one of the formulas below to...
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Sales Variable manufacturing and...
What term refers to the encoded information of the communication process? a. Feedback b. Channel c. Decoding d. Message
When we traditionally think about leadership, we may envision someone who is leader-first: focused on power, money and material possessions, either for themselves, for their company or both....
Knowing what you do now about influence and politics, there is always an opportunity for you to use this to your own advantage in a manner that is not advantageous for others. Some people manipulate...
All of the following are considered political behaviour EXCEPT ___________________ . a. impression management b. controlling lines of communication c. coalition building d. limiting others access to...
What term refers to making informal or formal appeals to organisational superiors for intervention? a. Personal appeals b. Upward appeals c. Group appeals d. Downward appeals
Albinism is a rare genetic disorder that affects one in 2 0 , 0 0 0 Europeans. In a random sample of 1 0 0 0 Europeans ; What is the probability that exactly two will have albinism?
One study found that the elderly who do not have children dissave at about the same rate as the elderly who do have children. What might this finding imply about the reason the elderly do not dissave...
Dhariwal Industries is currently reviewing its variance analysis process. Over the years, the company has used variance analysis to help control and manage costs and activities within the company....
Elsies Muffins makes two types of muffin that are sold to grocery stores: the standard muffin (which comes in various flavours such as carrot, chocolate chip, bran, and apple spice) and the gourmet...
Which of the following would indicate a high level of supplier power in an industry* a. Many suppliers in the industry provide similar products. b. A companys sales represent a high portion of the...

XXX is a TTT company that distributes electronic components in xxx imported from the YYY. Its main

Question:

Expert Answer:

Students also viewed these finance questions